(Yicai) Nov. 4 -- A group formed by Singapore’s Hong Leong Group and its Chinese partner Lianfa Group have secured the rights to build high-end commercial buildings and residences on two plots of land in downtown Shanghai for about CNY9 billion (USD1.3 billion) amid signs of recovery in the city’s property market.

The consortium, which comprises subsidiaries of Hong Leong along with Lianfa, recently acquired the development rights to the two adjacent land parcels in Huangpu district, next to the upmarket Xintiandi neighborhood, Shanghai Land Market, an official platform that oversees the auctioning and transfer of land rights, disclosed on Nov. 1. 

Based on the winning bid and the planned construction area, the average price paid per square meter was CNY117,500 to CNY118,800 (USD16,550 to USD16,735).

The luxury property market in Shanghai, particularly in areas such as Xintiandi, has historically seen robust demand and record-breaking prices. The involvement of Hong Leong and its subsidiary, City Developments, underscores the area's investment appeal.

City Developments, a unit of the more than 60-year-old Hong Leong, is one of Singapore's leading real estate developers and has previously worked on luxury homes in Shanghai, while Xiamen-based Lianfa has maintained its position among China's top 100 builders for 18 consecutive years.

An industry insider told Yicai that sales prices of new luxury projects in Xintiandi are expected to continue breaking records as the area's residential landscape evolves. For example, Lake Ville (Phase VI), a project near the newly acquired plots, sold all 108 units on Sept. 27, the first day. With each unit costing around CNY110 million (USD15.5 million), they sold for an average of CNY210,000 per sqm.

In June, the villa section of another nearby project, Shunchang Jiuli, set a new record for Shanghai with an average of CNY298,000 per sqm. The project's apartment section, comprising 500 luxury units, achieved an average price of CNY172,000 per sqm when sales began in March.

Editors: Tang Shihua, Emmi Laine